Government Launch Consultation on Modernising Council Tax Including Transparency Over How Money is Spent

The Government has launched a consultation on proposals aimed at overhauling council tax for households in England, including changes to the administration of council tax as government unveils plans to modernise the billing process to make it fairer, simpler.

Government plans include 12 monthly billing by default, action to crack down on punitive punishment for missed payments and fairer treatment for the most vulnerable households are all being considered by the government in the biggest changes to the operation of the council tax system since 1993.

The revamp could see better protection for those falling behind on bills by stopping debts spiralling while potentially capping the fees added to debt when going to court and changing  when a household may become liable for a full-year’s bill. 

Minister for Local Government and English Devolution, Jim McMahon OBE said: 

"As part of our Plan for Change, we’re putting working people first."

"We are listening and taking action to make council tax fairer, more transparent and easier to manage. Under our plans, local government will be there to support, and not to punish, people who fall behind."

The proposed changes by government follows a long running campaign by MoneySavingExpert.com founder Martin Lewis and his charity the Money and Mental Health Policy Institute (MMHPI) which have called for action on the “outdated” escalation that can happen when someone falls behind with their Council Tax payments. 

Martin Lewis, founder of MoneySavingExpert.com and The Money & Mental Health Policy Institute Charity, said:

"Many parts of the Council Tax system are broken, and having called for some of these fixes for nearly 20 years, I’m delighted the government has listened and rapidly launched this long-due consultation, including many of the administration areas I hear the most complaints on.  “Council Tax rapid and aggressive debt collection methods currently hurt millions and disproportionately affect those with mental health problems. Within three weeks of missing a monthly payment many councils say you must pay for the whole year… ridiculous, how can people who can’t afford to pay for a month, suddenly pay for a year? After a further three weeks councils can call bailiffs in and rack up charges on charges. No commercial lender is allowed to behave like this, meaning constituents are treated worse than consumers. Worse, it’s counter-productive, can add to council’s costs and still doesn’t mean people can pay it back. The government has listened to our evidence, and this consultation thankfully looks at slowing it down, adding-in consideration, capping added costs, and pointing people towards help to pay."

"Plus, as council tax bands haven’t been revalued since the stop-gap drive-by valuations first done back in 1991 – while looking at that isn’t in the scope of this consultation – it’s only right that if people think they’re wrongly in too high a band, as 100,000s likely are, the government is consulting on making it easier to challenge, so people can pay the right price. The consultation is also proposing help for some of the most vulnerable – we’ve long campaigned on the horribly-named Severe Mental Impairment discount, which is underclaimed, overcomplex and underpublicised, and this gives an opportunity to move towards a simpler, more universal, less off-putting application process."

The consultation is seeking views on proposals to increase the time before councils can request a full council tax bill from households.

It is also proposing the introduction of a cap on fees added to debt when going to court and changing?when a household may become liable for a full-year's bill.

Cllr Pete Marland, chair of the Local Government Association's Economy and Resources Board, said that councils have ‘implemented a wide range of measures to ensure that recovery practices are fair, and support is available for households who are struggling to pay their bills.’

The government consultation is also looking at how the council tax bill and council spending of money raised from the council tax can be more transparent and how information on that spending can be linked to spending on local services as part of the bill information and also how the billing information is provided to households.

The consultation is open until the 12th September 2025 and can be found via: https://www.gov.uk/government/consultations/modernising-and-improving-the-administration-of-council-tax/modernising-and-improving-the-administration-of-council-tax#modernising-council-tax-billing